Monthly Archives: July 2011

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Smart Responses to Common Objections

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The savvy Freelancer knows to make hay while the Summer sun shines and contract assignments dwindle.  Registering for a conference that will expand your knowledge and your network is one way to make good use of your time.  Setting up meetings with potential clients that you’ve perhaps been pursuing since last November is another good use of your time.  Despite vacations,  I’ll bet they’re more available to meet you for lunch or coffee in July and August.  Summer is the time for Freelancers to sow relationship seeds that will be harvested as billable hours come Autumn.

Along the way,  we will unfortunately have an objection tossed onto our path by a skeptical prospect.  All may appear to be rosy until it’s time to schedule the appointment—and then your prospect balks.  “What is it that we’re supposed to talk about?”  “I’m not sure if we’ll have any of your kind of projects on the immediate horizon.”  Or maybe the stumbling block won’t get thrown at you until the face to face is on.  Whenever it happens,  your potential client will be in grave danger of fading away and  you’ll need effective CPR to save your budding relationship.

Fortunately,  client objections tend to fall into predictable broad categories.  To formulate a credible response,  you must first recognize the real question that underlies the objection— that would be the category it falls into.  There are only a handful of objection categories that Freelancers will most often encounter.  Take a look at these two:

I.     No trust

Your prospective client doesn’t trust you and questions your experience and abilities,  or might be somewhat cool toward you, because you are an unknown quantity.  The remedy is to obtain an endorsement from someone who is known and respected by your prospect.  If you sense that you are being held at arm’s length and rapport is not being established,  name a client  (or organization)  for whom you’ve worked,  one who could be familiar to the prospect.  If possible,  strengthen your hand by attending a gathering  (social or professional)  that the prospect is known to attend.  Proceed to let your prospect witness you interacting as a peer with colleagues and friends he/she knows and admires.   Your prospect will feel much more comfortable with you,  the ice will melt and you’ll soon be invited into the office to talk turkey.

II.     No need

Sometimes a prospect just wants to blow a Freelancer off,  so we’re told that there is no need for our services  (even though we know that’s not the truth!).  Other times we hear this objection because the prospective client doesn’t know us or have reason to trust us,  so he/she will fudge the truth and claim to have no use for what we’re selling.  Keep talking and don’t be shut down by this one if you know there is a need for your brand of expertise.  This client must be convinced of the value and ROI of what you bring.  If you’ve worked with clients who would be familiar to this prospect,  drop the name and briefly describe the successful outcome of your project.

Talk about the revenue stream that was created or the money that was saved or the market share gained.  Then ask a pertinent question in an area you suspect may be of interest and where your knowledge and expertise shine.  “What about _____ keeps you awake at night?”  “How do you and your team get your arms around…?”  Get this client to open up and talk about what’s really going on and you may find yourself in a conversation about how you might be able to help them out.

More on this topic next week.   Thanks for reading,

Kim

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Pareto’s Principle, or the 80/20 Rule

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In 1906,  the economist and sociologist Vilfredo Pareto examined wealth distribution in Italy and found that 80 % of that nation’s wealth was controlled by 20 % of the population.  (In the U.S. as of 2009,  the top 5 % of the population controlled 63.5 % of the wealth and the bottom 80 % controlled 12.8 %.  Source: The Economic Policy Institute Briefing Paper # 292,  March 23, 2011)  Pareto dedicated his career to exploring the nature of individual and group social action,  along with studying the distribution of wealth in society.  Pareto’s discovery came to be known as Pareto’s Principle,  colloquially known today as the 80/20 Rule. 

Pareto determined mathematically that while numerous factors are connected to any given outcome,  only a select few are able to impact that outcome in a significant way.  Anecdotally,  I think most would agree that the principle holds up in real life.  The 80/20 Rule has been widely applied in business and several truisms have been noted, including:

  • 80 % of your sales are generated by 20 % of your customers
  • 80 % of your profits grow from 20 % of your working hours
  • 80 % of your sales come from 20 % of your product/service line
  • 80 % of customer complaints emanate from 20 % of your customers

Are you trying to get in the door with certain clients who will award to you the projects and billable hours that will allow you to achieve your profitability goals?  Of course you are!  Maybe it’s time to apply the science of Pareto’s Principle to the pursuit of an expanded client list and limit the randomness of networking and prospecting.  As Pareto discovered,  it’s vital to identify those critical few variables that provide the majority of leverage,  or problem-solving power,  when trying to achieve objectives.  In this assignment certain assumptions will be made,  such as the strength of your value proposition and your understanding of who would be an ideal client.

Get the critical few variable identification process started by listing all possible factors that influence your ability to sign a client.  Next,  pare the list down by filtering out the “trivial many”,  as Pareto termed factors that will have minimal impact on the desired outcome.  You’ll end up with about a half dozen critical variables,  powerful factors  that when impacted,  i.e. leveraged,  in the right fashion by the right person will influence the outcome and get you an audience with the decision maker who can award you a plum contract.

Ponder the critical variables on your priority list.  They have the power to either clear your path or block your success indefinitely.   Which critical variables,  if any,  might you be able to leverage on your own?  Which are beyond your reach and require the intervention of an ally?  Are any variables likely beyond the control of anyone save the client?  When you’ve determined which critical variables might possibly be leveraged by either yourself or an ally,  then consider carefully which of those factors will be most easily leveraged and how you should proceed.  You’re looking to leverage 20 % of the critical 20 %,  if you know what I mean.

On my priority list,  there are seven items.   Three critical variables appear to be within my control or that of an ally and four appear to be outside of my ability to impact  (including budget limitations).  Introductions and endorsements to the right people are both my barriers and critical success factors and I see a possibility for leverage.

Over the past 6-8 weeks I’ve had two endorsement/introductions to potential clients,  plus a promise from an influential advocate to try to help me resuscitate a client relationship that derailed because of competing organizational priorities and budget limitations.  At the end of July,  I will attend a conference where I hope to meet a certain prospect and I hope that the right person introduces us,  i.e. someone my prospect knows well and who will provide an endorsement for me.   I am working the 80/20  Rule,  planning to leverage critical variables wherever possible.  Wish me good luck!

Thanks for reading,

Kim

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Love Thy Competitor

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If you are the type of Freelancer/business owner who believes that a primary business goal is to annihilate and destroy your competition,  then you’re likely destined to become a less successful entrepreneur.  Research can now demonstrate the wisdom of the adage,  “keep your friends close and your enemies closer.”

A 2004 study conducted by James Westphal,  professor of management at University of Texas/Austin,  examined CEO friendships in 293 U.S. companies and found that regardless of the intensity of competition within a given industry,  rival CEOs who formed friendships enjoyed distinct business-related advantages over those who shunned competitors.

According to Westphal,  not only is it possible to make friends with competitors,  it’s advisable.  He explained the advantages of friendships among rivals this way:  when business owners get together,  what do we do?  Talk shop.  We compare notes,  discuss what’s new in the industry,  talk about the economy and how it’s impacting customer behavior.

In other words,  by going to trade industry conferences and meeting,  greeting and getting to know rival Freelancers,  you’ll obtain information and get exposure to perspectives that can help make you more successful.  So think about following a bit of counter-intuitive advice and realize that business is not always a zero-sum game.  A competitor’s win does not automatically mean your loss.

If getting chummy with the competition makes you feel a little queasy,  then get friendly with a competitor based in another locale.  The distance will create a boundary that could make it comfortable for the two of you to trade ideas about cheap and savvy advertising options,  how to make your clients happy,  or how to take advantage of,  or protect yourself from,  market trends.

In some instances,  you may decide to collaborate with a competitor.  It’s potentially risky,  but forging a strategic  collaboration with one of your competitors can benefit the bottom line and help both entities to thrive.  It can be a smart expansion or survival strategy for Freelancers and other small business owners who are trying to remain viable.  Maybe there is a partnership you can set up with the right semi-rival?   It’s called coopetition.

Get to know a fellow Freelancer who works in your own,  or a related,  field.  It’s preferable if each of you has discrete strengths,  with limited potential for overlap.  Meet for coffee and broach the subject of joining forces to make money.  How can you combine your strengths and approach clients with an innovative and more desirable package?  There’s nothing better than giving clients more reasons to do business with you.

Collaborations can work in a number of ways.  Just a couple of months ago,  a lady named Julie presented me with an idea where we can add-on or up-sell certain of each others’ services.  There is potentially a complementary need in a market segment that we share and Julie wondered if some selective cross-promotion would be beneficial.  Together,  we’re hoping to gain entry to clients where separately neither could get in the door.

Another form of coopetition is establishing a referral relationship with a near-rival.  Accountants and bookkeepers have done this forever,  with much success.  Their functions have similarities,  but each party knows and respects the boundaries and knows how to work together.

Nevertheless,  do not be naive.  Take precautions and clearly define boundaries and expectations.  Watch your back and work only with someone you know to be trustworthy.  Also,  do not underestimate the potential for difficulties in establishing and sustaining a coopetition arrangement.  Assumptions about appropriate customer service or corporate culture can derail your best intentions.  Careful planning and execution are crucial if coopetition is to work smoothly.  In close collaborations,  a written non-disclosure, non-compete agreement will be essential.

Finally,  remember where friendship ends and business begins.  There will be sensitive issues that are best kept to yourself,  like new business initiatives or the  “secret sauce”  of how you deliver your unique services.  Keep your antennae raised as you and a worthy competitor mull over ways to share resources or expertise and boost profits in the process.

Thanks for reading,

Kim

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What’s Your Influencer Score?

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If you have a Facebook,  LinkedIn or Twitter account, get ready to have rating points assigned to your online presence.  There’s yet another way to keep score in this world and the newest yardstick is your social media reach. The rating system resembles a credit score or Google page ranking and it assesses your social media power and influence.  Three companies, Klout, Peer Index and Twitter Grader, will analyze and determine who the heavy hitters are.

Who are the movers and shakers,  experts and taste makers,  across a range of topics and specialties within a certain geolocation? Marketing departments want to know.  While authors, celebrities, politicians and athletes have traditionally been capable of influencing opinions on a large scale, social media have given a powerful voice to ordinary citizens and a new league of authorities has emerged.

The rating companies measure your Facebook (Klout),  LinkedIn  (Klout, coming soon)  and Twitter  (all three)  friends,  connections and tweets on their respective algorithms.  According to analysts at Hewlett Packard who tried to crack the codes,  a large network of contacts and friends is not the primary value of the influencer score.

Peer Index focuses on topic resonance  (how much interest you generate within your area of expertise),  subject authority  (perceived credibility and trust)  and activity  (how much content you generate within your topic)  in its ranking recipe.  If you’re looking to game the system  (you wouldn’t try that, would you?),  it is beneficial to become well known for a particular topic and avoid being a generalist.

In other words,  go narrow and deep.  Boost your influencer score  (and online brand)  by demonstrating knowledge and expertise,  trustworthiness and credibility and enthusiasm and passion for your preferred subject.

Furthermore,  demonstrate your ability to influence those in your network with calls to action and recommendations that engage and inspire followers and friends and cause them to spread the word about your choices and opinions.  Did you get out the vote for Obama or persuade people to join the revolution in Cairo? If so, then you are an influential social media darling.

Surprisingly,  blogs,  newsletters and YouTube are not in the ratings mix at this time,  but tweets and online profiles most definitely are.  The rankings of your connections and friends also factor impact your score,  as do the rankings of those who retweet you.

It’s possible to sign yourself up for free and learn your Twitter rating on Peer Index http://peerindex.net or Twitter Grader http://twitter.grader.com and your Facebook score on Klout http://klout.com.  The latter recently announced a deal to rank LinkedIn profiles  (I wonder if activity on the Answers Forum will be in the algorithm?).

So what’s in it for high scorers? Thousands of companies have already signed on to buy data and big influencers are positioned to receive all manner of promotional goodies.  As reported in The New York Times on June 26, 2011,  Audi will begin to offer special promotions to Facebook users based on their Klout scores.

Last year, Virgin America selected highly rated Facebook influencers in Toronto and rewarded them with free round-trip flights to Los Angeles or San Francisco.  The Palms Hotel and Casino in Las Vegas used Klout scores to choose Facebook influencers and give them either free room upgrades or free admission to Cirque du Soleil.

Nevertheless,  a corrective is in order.  While it is apparent that social media influencers exist and in certain circumstances they are able to impact the actions and opinions of others,  they do not necessarily live up to the hype.  Duncan Watts,  author of  “Everything is Obvious Once You Know the Answer” (2011),  asserts that the  “influencers”  do not always obtain impact through their expertise,  persuasiveness,  popularity or reputation.

Watts used computer simulations to model how information is likely to disperse through social media and found that the spread of an idea or story depends upon  “a critical mass of easily influenced people,  who in turn influence other easy-to-influence people.”  When this critical mass exists,  “even an average individual is capable of triggering a large cascade.”

Well,  so much for algorithms.  However,  it may be fun to sign up and get your influencer score anyway. You might somehow manage to get a high rating,  perhaps because you’re connected to other high influencers,  and get some promotional comps as a result.  But then again,  being connected to the right people has always  been how to get the goodies,  with or without social media influence!

Thanks for reading,
Kim